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In New York overnight, the S&P500 jumped to its highest level in 13 months, markets have come to expect that the Federal Reserve will skip a rate increase at this week’s Fed meeting. The Fed has hiked 10 consecutive times since beginning its policy tightening cycle in March last year. US investors are also awaiting inflation data out on Tuesday in the US, with economists expecting CPI to show inflation dropping to a 4% annual rate in May. All three major benchmarks rallied overnight. The S&P500 up 0.9%, the Dow up 0.56% and the Nasdaq up 1.53%.

European markets also closed higher, ahead of the major central bank meetings.

What to watch today:

• To start the shortened trading week, after yesterday’s public holiday, the SPI futures are suggesting that our local market will open 0.35% higher this morning.
• In commodities,
  • The oil price is down to its lowest level in over 5-weeks, with concerns about weakening demand in China as well as rising Russian crude supply outweighed Saudi Arabia’s plans to slash output. The oil price is currently trading 4.25% lower at US$67.12 per barrel. So, keep watch of energy producers today.
  • The gold price is also lower ahead of central bank meetings scheduled this week for the Federal Reserve, the European Central Bank, and the Bank of Japan.
  • Meanwhile, iron ore is up more than 3%, trading at US$115.50 per tonne, extending its rebound from the six-month low amid expectations of improved demand.
• In economic news, at 10:30am today AEST Westpac will release its data on consumer confidence for June and at 11:30am today NAB will release its data on business confidence for May.

Trading Ideas:

• Bell Potter have upgraded their recommendation on PWR Holdings (ASX:PWH), a leading provider of customised cooling solutions to the global motorsports market and the wider automotive industry. They’re upgraded their rating from a Hold to a Buy, after reviewing forecasts considering some soft trading updates from various retailers. The price target has been decreased by 2% to $10.50, which is more than a 15% premium to the share price, hence the upgrade.
• And Trading Central have identified a bearish signal in Region Group (ASX:RGN), indicating that the stock price may fall from the close of $2.44 to the range of $2.33 to $2.35 over 26 days, according to the standard principle of technical analysis.